Does v. Gillespie

Jane Does, 1-3; Planned Parenthood of Arkansas & Eastern Oklahoma, doing business as Planned Parenthood Great Plains, Plaintiffs - Appellees,v.Cindy Gillespie, [1] Director of the Arkansas Department of Human Services, Defendant-Appellant. American Public Health Association; National Center for Lesbian Rights; National Family Planning & Reproductive Health Association; National Health Law Program; National Latina Institute for Reproductive Health; National Women's Law Center; Sexuality Information and Education Council of the U.S., Amid on Behalf of Appellees. Planned Parenthood of Arkansas & Eastern Oklahoma, doing business as Planned Parenthood Great Plains; Jane Does, 1-3 Plaintiffs - Appellees,v.Cindy Gillespie, Director of the Arkansas Department of Human Services, Defendant-Appellant.

Submitted: September 21, 2016

Appeals
from United States District Court for the Eastern District of
Arkansas - Little Rock

Before
COLLOTON, MELLOY, and SHEPHERD, Circuit Judges.

COLLOTON, CIRCUIT JUDGE.

The
Arkansas Department of Human Services terminated its Medicaid
provider agreements with Planned Parenthood of Arkansas and
Eastern Oklahoma after the release of controversial video
recordings involving other Planned Parenthood affiliates.
Planned Parenthood of Arkansas and Eastern Oklahoma could
have challenged the termination through an administrative
appeal and judicial review in the Arkansas courts, but it
declined to do so. Instead, three Arkansas patients
identified by the Planned Parenthood affiliate sued the
Director of the Department under 42 U.S.C. § 1983,
claiming that the Department violated a federal right of the
patients under the Medicaid Act to choose any
"qualified" provider that offers services that the
patients seek.

The
district court enjoined the Department from suspending
Medicaid payments to Planned Parenthood of Arkansas and
Eastern Oklahoma for services rendered to the three patients.
The court later entered a broader injunction that forbids
suspending payments for services rendered to a class of
Medicaid beneficiaries. The Director appeals, and we conclude
that the plaintiffs do not have a likelihood of success on
the merits of their claims. The provision of the Medicaid Act
does not unambiguously create a federal right for individual
patients that can be enforced under § 1983. We therefore
vacate the injunctions.

I.

Planned
Parenthood of Arkansas and Eastern Oklahoma, an affiliate of
the Planned Parenthood Federation of America, operates health
centers in Arkansas. We will call the local affiliate
"Planned Parenthood" for short. The district court
found that the Arkansas health centers "provide family
planning services to men and women, including contraception
and contraceptive counseling, screening for breast and
cervical cancer, pregnancy testing and counseling, and early
medication abortion."

As of
2015, Planned Parenthood and the Arkansas Department of Human
Services were parties to contracts under which Planned
Parenthood participated in the Arkansas Medicaid program. The
contracts provided that either party could terminate them
without cause by giving thirty days' notice. The
Department also could terminate the contracts immediately for
several reasons, including for conduct that is sanctionable
under the applicable Medicaid Provider Manual.

On
August 14, 2015, Governor Hutchinson of Arkansas directed the
Department to terminate its Medicaid provider agreements with
Planned Parenthood. The Governor said in a public statement
that it was "apparent . . . after the recent revelations
on the actions of Planned Parenthood, that this organization
does not represent the values of the people of our state and
Arkansas is better served by terminating any and all existing
contracts with them." Context makes clear that the
"recent revelations" to which the Governor referred
were video recordings released by the Center for Medical
Progress that purported to show employees of other Planned
Parenthood affiliates discussing the sale of fetal tissue for
profit. The parties dispute whether the Planned Parenthood
affiliates involved in the recordings engaged in any unlawful
or unethical conduct.

The
Department, on August 14, 2015, notified Planned Parenthood
that it was terminating the Medicaid provider agreements,
effective thirty days later, and notified Planned Parenthood
of its right to file an administrative appeal. Before the
thirty days expired, on September 1, the Department sent a
second notice. This one stated that the Department was
terminating its agreements with Planned Parenthood for cause,
because "there is evidence that [Planned Parenthood]
and/or its affiliates are acting in an unethical manner and
engaging in what appears to be wrongful conduct." Rather
than discontinue the contracts immediately, however, the
Department set the termination date for September 14, 2015,
the same date specified in the first letter.

Federal
regulations authorized by Congress and promulgated by the
Secretary of Health and Human Services require each State to
establish appeal procedures for Medicaid providers. 42 U.S.C.
§§ 1396a(a)(4), (39); 42 C.F.R. § 1002.213.
Under Arkansas law, a provider who is terminated has a right
to file an administrative appeal within thirty days of the
termination, and then to seek judicial review. Ark. Code R.
§ 016.06.35-161.400; Ark. Code Ann. § 20-77-1718.
Planned Parenthood, however, declined to exercise its appeal
rights under Arkansas law and instead identified three
patients who were willing to join the organization in a
federal lawsuit.

On
September 11, 2015, Planned Parenthood and three patients
identified as "Jane Does" sued the Department's
Director in the district court, seeking a temporary
restraining order and a preliminary injunction to prevent the
Department from terminating Planned Parenthood's
contract. The plaintiffs alleged that they were likely to
prevail on a claim that the Department, by excluding Planned
Parenthood from the Medicaid program for a reason unrelated
to its fitness to provide medical services, had violated
§ 23(A) of the Medicaid Act. This section is described
as the Medicaid "free-choice-of-provider"
provision. 42 U.S.C. § 1396a(a)(23)(A). The plaintiffs
further asserted that without an injunction, they would
suffer irreparable harm. The plaintiffs claimed that §
23(A) creates a judicially enforceable right, a violation of
which can be remedied through an action under 42 U.S.C.
§ 1983. The district court granted a temporary
restraining order.

After
further briefing by the parties, Planned Parenthood withdrew
its claim for relief as a provider, but the Jane Does
proceeded with their claims as patients, and the district
court granted a preliminary injunction in favor of the Jane
Does. The court concluded that § 23(A) creates a private
right enforceable by the Jane Does under § 1983, and
that they were likely to prevail on the merits of their claim
that the Department unlawfully terminated its contract with
Planned Parenthood. The court also determined that, without
an injunction, the Jane Does would suffer irreparable harm.
The Department appealed the grant of the preliminary
injunction, and we heard oral argument.

After
the appeal was submitted, the district court granted the
plaintiffs' motion to certify a class of "patients
who seek to obtain, or desire to obtain, health care services
in Arkansas at [Planned Parenthood] through the Medicaid
program." The district court then issued a second,
broader injunction that forbids the Department to suspend
Medicaid payments to Planned Parenthood for services rendered
to Medicaid beneficiaries who are members of the class. The
district court's order granting the second injunction
incorporated the court's reasoning from the first order.

The
Department filed a notice of appeal of the class-wide
preliminary injunction. The parties then filed a joint motion
requesting that we consolidate the two appeals, and they
waived further briefing and argument. We consolidated the
appeals and now consider them together.

II.

A party
seeking a preliminary injunction must demonstrate, among
other things, a likelihood of success on the merits.
Munaf v. Geren, 553 U.S. 674, 690 (2008). In this
case, a threshold question bearing on likelihood of success
is whether the Jane Doe plaintiffs and the certified class of
Medicaid patients have a judicially enforceable right under
the cited provision of the Medicaid Act, 42 U.S.C. §
1396a(a)(23)(A). If the statute does not create an
enforceable federal right, then the Jane Does and the class
members cannot sue under § 1983, and there is no
likelihood of success on the merits.

Section
1983 provides a cause of action against any person who, under
color of law, subjects a citizen to the deprivation of any
rights secured by the laws of the United States. Generally
speaking, § 1983 supplies the remedy for vindication of
rights arising from federal statutes. Maine v.
Thiboutot, 448 U.S. 1, 4-8 (1980). For legislation
enacted pursuant to Congress's spending power, however,
"the typical remedy for state noncompliance with
federally imposed conditions is not a private cause of action
for noncompliance but rather action by the Federal Government
to terminate funds to the State." Pennhurst State
Sch. & Hosp. v. Halderman, 451 U.S. 1, 28 (1981).

To
support an action under § 1983, a plaintiff relying on a
federal law must establish that Congress clearly intended to
create an enforceable federal right. Gonzaga Univ. v.
Doe, 536 U.S. 273, 283 (2002). There was a
time, illustrated by Wilder v. Virginia Hospital
Ass'n, 496 U.S. 498 (1990), when the Medicaid Act
was deemed to create an enforceable right if the provision in
question was "intend[ed] to benefit the putative
plaintiff." Id. at 509 (alteration in original)
(quoting Golden State Transit Corp. v. City of L.A.,
493 U.S. 103, 106 (1989)). Starting from that premise,
Wilder held that the Boren Amendment to § 13(A)
of the Medicaid Act created a federal right for providers
that was enforceable under § 1983.

Later
decisions, however, show that the governing standard for
identifying enforceable federal rights in spending statutes
is more rigorous. It is not enough, as Wilder and
Blessing v. Freestone, 520 U.S. 329 (1997), might
have suggested, to show simply that a plaintiff "falls
within the general zone of interest that the statute is
intended to protect." Gonzaga, 536 U.S. at 283.
It is now settled that nothing "short of an
unambiguously conferred right" will support a cause of
action under § 1983. Id.

Most
recently, therefore, the Court observed that Medicaid
providers seeking to enforce § 30(A) of the Medicaid Act
did not rely on Wilder to proceed under § 1983,
because the Court's later decisions "plainly
repudiate the ready implication of a § 1983 action that
Wilder exemplified." Armstrong v.
Exceptional Child Ctr., Inc., 135 S.Ct. 1378, 1386 n.*
(2015). The Court explained that Gonzaga expressly
rejected the notion, "implicit in Wilder,
" that something "short of an unambiguously
conferred right" can support a cause of action under
§ 1983. Id. Armstrong thus made explicit what
was implicit in Gonzaga, where the dissenting
opinion concluded that the Court "sub silentio
overrule[d] cases such as . . . Wilder, "
because the Boren Amendment did not "clear[ly] and
unambiguous[ly] intend enforceability under §
1983." 536 U.S. at 300 n.8 (Stevens, J.,
dissenting) (second and third alteration and emphasis in
original) (citation omitted). Congress repealed former §
13(A) and the Boren Amendment in 1997, see Balanced
Budget Act of 1997, Pub. L. No. 105-33, § 4711, 111
Stat. 251, 507-08, so the Court will have no occasion
formally to overrule Wilder. But for purposes of our
obligation to apply Supreme Court precedent, see Agostini
v. Felton, 521 U.S. 203, 237 (1997), the Court's
"repudiation" of Wilder is the functional
equivalent of "overruling, " as the Court uses the
terms interchangeably. Obergefell v. Hodges, 135
S.Ct. 2584, 2606 (2015); Keene Corp.v. United
States, 508 U.S. 200, 215 (1993); Planned Parenthood
of Se. Pa. v. Casey, 505 U.S. 833, 864
(1992).[2]

The
provision at issue in this case appears in a section of the
Medicaid Act concerning state plans for medical assistance.
The Act provides, with exceptions not relevant here, that the
Secretary of Health and Human Services "shall approve
any plan which fulfills the conditions specified in
subsection (a)." 42 U.S.C. § 1396a(b). Subsection
(a), in turn, declares that "[a] State plan for medical
assistance must" satisfy some eighty-three conditions.
The condition involved here is § 23(A), namely, that the
state plan must "provide that . . . any individual
eligible for medical assistance (including drugs) may obtain
such assistance from any institution, agency, community
pharmacy, or person, qualified to perform the service or
services required . . . who undertakes to provide him such
services." Id. § 1396a(a)(23)(A).

The
Jane Does contend that § 23(A) creates an enforceable
federal right for individual patients to receive services
from any provider who is "qualified to perform the
service" that they seek. If Planned Parenthood is
qualified to perform the service, they argue, then §
1983 provides a remedy through which a court can require the
State to maintain its contract with Planned Parenthood, so
that the Jane Does can obtain assistance from that provider.

We see
significant difficulties with the contention that §
23(A) unambiguously creates an enforceable federal right.
First, the focus of the Act is two steps removed from the
interests of the patients who seek services from a Medicaid
provider. Like the provision at issue in Armstrong,
"[i]t is phrased as a directive to the federal agency
charged with approving state Medicaid plans, not as a
conferral of the right to sue upon the beneficiaries of the
State's decision to participate in Medicaid." 135
S.Ct. at 1387 (plurality opinion). In other words, "[i]t
focuses neither on the individuals protected nor even on the
funding recipients being regulated, but on the agenc[y] that
will do the regulating." Alexander v. Sandoval,
532 U.S. 275, 289 (2001). A statute that speaks to the
government official who will regulate the recipient of
federal funding "does not confer the sort of
'individual entitlement' that is enforceable
under § 1983." Gonzaga, 536 U.S. at 287
(quoting Blessing, 520 U.S. at 343). Even where a
subsidiary provision includes mandatory language that
ultimately benefits individuals, a statute phrased as a
directive to a federal agency typically does not confer
enforceable federal rights on the individuals. Univs.
Research Ass'n, Inc. v. Coutu, 450 U.S. 754, 756
n.1, 772-73 (1981).

Second,
Congress expressly conferred another means of enforcing a
State's compliance with § 23(A)-the withholding of
federal funds by the Secretary. 42 U.S.C. § 1396c.
Congress also authorized the Secretary to promulgate
regulations that are necessary for the proper and efficient
operation of a state plan. Id. § 1396a(a)(4).
Under that authority, the Secretary has required States to
give providers the right to appeal an exclusion from the
Medicaid program. 42 C.F.R. § 1002.213.[3] Because other
sections of the Act provide mechanisms to enforce the
State's obligation under § 23(A) to reimburse
qualified providers who are chosen by Medicaid patients, it
is reasonable to conclude that Congress did not intend to
create an enforceable right for individual patients under
§ 1983. See Suter v. Artist M., 503 U.S. 347,
360-61, 363 (1992), superseded by statute on other
grounds, 42 U.S.C. §§ 1320a-2, 1320a-10;
see also Gonzaga, 536 U.S. at 281 (applying
Suter).

Accepting
the Jane Does' position would result in a curious system
for review of a State's determination that a Medicaid
provider is not "qualified." Federal law, as noted,
requires that when a State terminates a Medicaid provider,
the State must afford the provider an opportunity for
administrative appeal and judicial review in the state
courts. Under the Jane Does' vision, while the provider
is litigating its qualifications in the state courts, or
after the provider unsuccessfully appeals a determination
that it is not qualified, individual patients separately
could litigate or relitigate the qualifications of the
provider in federal court under § 1983. Each adjudicator
must apply a rather imprecise standard, asking whether the
provider is "qualified to perform the service or
services required." The potential for parallel
litigation and ...

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